There may be instances where a beneficiary has an immediate need to access funds held in trust yet, the terms of the trust prevent the trustees from proceeding with an income or capital distribution to such beneficiary. In such a situation, if the deed of trust grants the right to the trustees to make a loan, it may be appropriate for the trustees to consider lending an amount to the….
Trust Lending to a Beneficiary Continue Reading »
Loans, Trustee, Trusts
The small business deduction is a key tax incentive for entrepreneurs of small businesses. If the corporation qualifies as a Canadian controlled private corporation (commonly referred to as CCPC), the net federal tax rate for active business income is 9% on the first $500,000. The Income Tax Act (the “Act”) also has association rules to prevent business owners from multiplying the small business deduction among their businesses. When two or….
Power of Attorney for Property & The Tax Association Rules Continue Reading »
Estate Planning, Power of Attorney, Tax Issues
Corporately-owned life insurance is viewed as a key strategic option in tax and estate planning, notably for business owners. There are several strategic reasons to consider corporately-owned insurance as part of the estate plan, such as equalization among the beneficiaries of their estate or to fund the taxes triggered on death. Essentially, corporate life insurance plays a role in the wealth preservation plan. Another goal of wealth planning is to….
Tainting The Spousal Trust? Continue Reading »
Estate Planning, Insurance, TrustsAre you a U.K. citizen? A simple question that may trigger many additional questions from the estate advisor if the answer is, yes. Why? Canada and the U.K. impose income tax obligations on the basis of a taxpayer’s residency. However, the current U.K. Inheritance Tax (IHT) applies to the much broader concept of domicile. Therefore, someone may be exempt from U.K. income tax on the basis of residing in another….
U.K. Inheritance Tax – It Could Apply Continue Reading »
International, Succession Planning, Tax Issues
Canadians often misunderstand (or are unaware) that the U.S. estate tax may apply to their estate. Indeed, if a Canadian dies owning U.S. situs assets with a gross value exceeding USD $60,000, their estate will have to file a U.S. estate tax return and, depending on the worldwide fair market value of their estate, could be subject to U.S. estate tax. From an estate administration perspective, one of the challenges….
The Importance of the U.S. Federal Transfer Certificate Continue Reading »
Executors, IRS, Succession Planning, Tax Issues, U.S. Citizen, United States, US TaxesWho is the settlor? A simple question but many take the answer for granted; essentially, the Deed of Trust indicates the settlor and a paragraph confirms the settlor’s intention and defines the settled property. A trust is established only upon the settlor expressing his or her wishes to create a trust and transferring property (referred to as the “settled property”) to the trustees of the trust. Is this sufficient to….
Who is the Settlor? Continue Reading »
Succession Planning, Trusts